Climate Change, Capitalism And Nuclear Power - The Closing Of Duane Arnold

The decision to close a perfectly good nuclear power plant well before it should have to close, is a complex decision that usually has to do with short-term profits and politics.

But not long-term economic or strategic thinking. And certainly not with concern over climate change.

NextEra Energy will close its Duane Arnold nuclear plant in Palo at the end of 2020, the only nuclear plant in Iowa. Despite being extremely well-run and reliable, the nuclear plant “no longer fits into Iowa’s changing energy portfolio.”

Iowa is experiencing a huge renewable energy boom, particularly for wind. Being in Tornado Alley, where millions of years ago even birds decided it was too windy to migrate through, wind turbines have a pretty good capacity factor – they produce their full energy capacity almost 45% of the time, better than almost anywhere in the world for wind.

At the same time, natural gas is so cheap that Iowa is planning on increasing that source. Of course, gas is certainly not emission-free, and every time a nuclear plant has closed in America over the last ten years, it has been replaced by gas, increasing those state’s carbon emissions.

Beginning about 10 years ago, this trend has, or will, engulf about 20 nuclear plants by 2026.

Duane Arnold produces about 5 billion kWhs of carbon-free electricity each year with a capacity factor of 90%. To replace that with wind, would require about 1,500 MW of new wind turbines at $1.5 million/MW, or $2.2 billion, just for construction. Two natural gas plants could do it for half that construction price, not including fuel costs or new pipelines.

This doesn’t seem to align well with any Green New Deal.

The economics of this closure seem odd. Officials say closing the nuclear plant will save as much as $300 million over 21 years, or about $14 million a year. This will translate to about $42/year in savings for every residential customer.

What? Save 42 bucks when we're talking about spending a trillion to curb global warming? Save 42 bucks to either lose 5 billion kWhs of carbon-free electricity by building two new gas plants for a billion dollars, or to spend $2 billion on new wind farms?

Presumably, the residents of Iowa are concerned about climate change or they wouldn't have installed so much subsidized wind. But then losing $42 a year is too high a cost for that much carbon-free electricity?

The other costs are even worse. Most nuclear plants are in smaller towns and cities, so when nuclear plants close, the surrounding towns are devastated. Local budgets are cut in half. The real estate market is ruined. Taxes are increased, even if the state helps out. There are always layoffs of police and firefighters.

That’s because nuclear jobs are the best in the business. They have the highest salaries, and there are more of them in nuclear per MW than any other energy source. The local tax revenue is better than anything those towns can get from other businesses, even high tech.

For what? $42 per year per person in savings? Do the people of Iowa really understand this?

“Really, our customers could start seeing that cost reduction, as early as 2021,” said President of Iowa Power and Light Terry Kouba, proudly.

With an additional $42 a year, the sky’s the limit!

Source: Forbes
Date: May 7, 2019